When you’re young and decide to take out those student loans you’re probably not thinking too much about how you’re going to repay them. You might be thinking a little about the future but you figure it’s going to be a while before those loans come due and then you’ll worry about it right? Well I know I was. I was really trying not to think about the time when those loans would be due and I would need to give that money back. Even though I didn’t borrow much I still knew I didn’t really want an extra bill every month (which is the same thing a lot of students think. You can read more about it here.)
One thing I really didn’t think about was how my student loans were going to affect me as a couple. When I tried to figure out the future of paying off my loans I really wasn’t thinking about a spouse being there to help me. It wasn’t a completely irrational thought it was just one that never really crossed my mind. I didn’t think about how he would be able to help or how my student loan was going to affect our lives as a couple, but it did.
Benefits of a Couple
When there’s more than one person paying off the student loans you’re able to pay a little more each month. This can be great because it means you’ll be paying back that money over a shorter period of time which means you won’t actually be paying back as much in interest. Your partner can help you come up with a little more than you might be able to come up with on your own because instead of one income you have two. It’s really great because I’m able to pay a lot more on my loans than I would have been because I have someone to help.
Another benefit is someone to help you budget. My husband is way better at math than I am. That means he has an entire schedule worked out to know when we’ll have my loans paid off by paying the amount we’ve been paying (double what I’m required to) each month. He knows down to the day which payment is going to finally pay it all off and that’s great. I’m awful at numbers so every time I try to figure these things out I get mixed up. With him it’s much easier.
Another benefit we haven’t mentioned to being part of a couple is that you may even be able to lower your interest rate after you’ve gotten married. Think about where you were when you first applied for that student loan. You may have just graduated from high school and never even owned a credit card. Or maybe you were like a lot of young teens and you used your card a little recklessly. Well by now you’re probably more mature. You likely have better credit and your spouse may as well. That’s when you want to refinance your student loan.
Refinancing your loan means you might be able to get a lower interest rate and that means lower payments, less money paid out over time and less time paying off your loans. So you get a triple bonus from just having better credit now than you did before. You want to make sure you’re taking advantage of this if you have decent credit because you could save a lot more money than you think. When you look at your next loan bill make sure you think about how much you’re paying just in the interest every month. The amount may surprise you.
Negatives of a Couple
One thing that can hurt you is your income is going to increase. If you are dating or engaged you don’t have to worry too much about how much money is coming into the household from both of you because the government doesn’t. They don’t count you as being a ‘couple’ until you get married. Once you get married however, your joint income becomes what the government looks at instead of your income as a single person. That means they start to expect your partner to help you pay your loans.
Now when this happens your student loan payments may go up. If you’re on a budgeted plan with the government that’s based on your income (for example, if you didn’t make enough for more traditional monthly payments) and you get married, your income goes up. Now whatever your spouse is making will count as part of your income and you’ll be required to pay a percentage of that towards your student loans as well. This may not be a good thing if you’re not making a lot of money because you may need that money to go towards other bills you share.
What To Know
Taking on your student loans as a couple doesn’t have to be entirely good or bad however. What you need to consider is everything you know about those loans. Sit down with your partner and talk to them about your loans. Discuss the amount of money you owe and how the payment plan is going to work. You need to work out a budget together and a way of making sure that you pay off everything the right way. This requires you to work things out as a team rather than trying to go it alone.
Student loans can be difficult and they can be expensive. When you bring a spouse in however, you can actually make the whole process much easier. You’ll be able to save yourself some money, make better payments and maybe even get refinanced. Definitely take advantage of all the help your spouse can give you. If you need more information about how you and your spouse should work out everything to do with your student loans you can check it out here. If you’re not quite there yet you can also apply for private student loans by checking out the application right here.